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Market Remains in Doldrums

Updated Sept. 10, 1996 5:13 p.m. ET

TORONTO -- Stock prices ended flat Tuesday, with Canadian equities in the doldrums compared with the volatility on Wall Street.

The Toronto Stock Exchange's 300 Composite Index fell 1.43 to 5147.12 after losing 1.35 Monday. By comparison, in New York Tuesday the Dow Jones Industrial Average fell 6.66 to 5727.18, after Monday's 73.98-point surge.

Traders said that the Dow's activity is misleading, based on the relatively flat performances Tuesday of broader indexes, such as the Standard & Poor's 500-stock index and the New York Stock Exchange Composite.

In Toronto, declining issues outpaced advancers, 502 to 394. Volume totaled 94.6 million shares valued at 1.16 billion Canadian dollars, up from Monday's total of 70.2 million shares valued at C$783.3 million.

Toronto's flat performance reflected offsetting moves in the heavily weighted bank- and commodity-related stock groups. The bank group rose 0.73%, but all of the major cyclical stock groups posted losses.

The battle between bank and resource stocks has characterized the market's performance for the past year, said John Kellet, vice-president of equities at Royal Bank Investment Management Inc.

Canadian bank analysts have been traveling to Europe and the U.S., arguing that Canada's bank issues are inexpensive relative to their counterparts in the U.S., Europe and Australia, Mr. Kellet said, to help explain current interest in these issues. In the bank group, Canadian Imperial Bank of Commerce rose 0.40 to 46.20.

At the opposite end, cyclical stocks suffered from profit-taking, as investors waited for the effects of monetary easing in Europe and Japan to spur on world demand for commodities, traders said.

In the case of the gold sector, which dropped 0.48% Tuesday, investors were worried about declining gold prices after the International Monetary Fund announced its plan to sell some of its bullion reserves.

On the Comex division of the New York Mercantile Exchange, the bullion price continued its recent slide, ending down 30 U.S. cents to US$383.10 an ounce.